‘Plan early for retirement living’

Buying a home or renting are choices that both have advantages for retired people, but planning for accommodations in one’s “golden years” should start early, online property listing service MyProperty.ph said.

MyProperty.ph said that although it is a Filipino tradition for retired people to either move in with their children or vice versa, particularly if the elderly person has health issues or otherwise needs assistance with daily tasks, many elderly people in good health choose to live independently or only with their spouse. For those looking for a home at retirement, renting and buying have different advantages depending on one’s circumstances.

“More often than not, money is the main factor affecting one’s decision to buy or rent,” MyProperty.ph said, stressing that costs usually increase for elderly people as health care becomes a greater concern. “Financing is only one part of the equation, however,” it added.

The key factor that makes it important to make a decision about buying or renting before reaching retirement age is the common requirement of home loans that places an age limit—usually 65 or 70 years at the time of the loan maturity, depending on the lender—on borrowers.

“Unless you choose a short loan term, or unless you are planning to pay outright in cash for a home, you need to consider your home buying options early,” MyProperty.ph said.

Inheritance concerns

For most retired people who have heirs, buying a property is a better choice, MyProperty.ph said, because it provides a home to leave to one’s children or grandchildren.

In this situation, home equity becomes an important consideration, the online property site explained. Home equity is the market value of the property less the outstanding loans on it, and grows in two ways, through
paying off the loans, and through appreciation of the property value.

MyProperty.ph said that one has to balance the attractiveness of the neighborhood where the home is located —which causes the value to appreciate in most cases—with the higher price of property in higher value areas.

The property site used the examples of two similar homes among its own listings, a two-bedroom, one bathroom home in Quezon City on a lot with an area of 34 square meters, and a nearly identical house in Imus, Cavite on a 36-square meter lot, which was priced P800,000 less at P1.1 million than the Quezon City property for P1.9 million.

“Can you afford to pay more—and are you willing to—to ensure that your home is worth more as time passes? If not, or if it is simply not relevant to you, renting would be a more sensible option,” MyProperty.ph said.

Travel and leisure

The sort of lifestyle one would like in his or her retirement years also plays a big part in the decision to rent or buy, MyProperty.ph said. People who would like to travel more would probably be better off renting than buying a property, it explained.

“Renting also gives you the flexibility of moving almost as soon as possible should something influence you to do so in the future, such as an illness that would require you to move closer to the hospital or your loved ones,” it added.

If on the other hand the homeowner is content to stay put in the neighborhood, buying may be the more attractive option. “If the home you happen to own has multiple rooms and all of your children have moved out, you could hang onto the property and rent out those rooms for additional income that can go to your retirement fund,” MyProperty.ph said.

Home maintenance

How much work one would like to put into one’s home also makes a difference, MyProperty.ph said. Those who wish to relax and not be troubled by home maintenance would probably prefer renting, where repairs and upkeep are the responsibility of the landlord, it explained.

On the other hand, owning a home allows one to freely make modifications, for example, if health needs require things like handrails, wider doorways or ramps to accommodate a wheelchair, or different bathroom fixtures, MyProperty.ph said.

“Every person is in a different place in their life, financially or otherwise, so there is no single cut-and-dried response to whether to buy or rent in retirement,” it said. “Aside from assessing your current situation, it would also help to discuss your options with professionals, such as a financial advisor, who can analyze your monetary standing, or a real estate broker, who has a good idea of the present conditions of local real estate markets.”